Report: Kroger/Albertsons Merger Facing FTC Lawsuit
The pushback against Kroger and Albertsons’ proposed $24.6 billion merger continues to mount, with a new report from Bloomberg claiming that the Federal Trade Commission (FTC) plans to file a lawsuit to block the deal as early as next week.
Multiple state attorneys general are expected to join, but it remains unknown how many and where the suit will be filed.
The news comes as the federal regulator and the country’s two largest grocery corporations near the expiration of a Feb 28 deadline to hold off closing the deal while regulators assessed its legality under anti-competition law. The lawsuit is expected to be filed ahead of that date.
The regulatory agency was originally expected to make a decision by January 17 and Kroger had previously said it would close the deal in “early 2024.” That deadline was revised to August 17 last month. Kroger executives have also previously affirmed they would fight for the deal in court, if necessary, so if a suit is filed, that means the timeline could be extended well beyond Summer 2024.
The Bloomberg report, citing anonymous sources, claims that Kroger and Albertsons are attempting to meet with FTC commissioners to prevent the suit.
In January, alongside the announcement that the deadline had been pushed, Washington state attorneys general Bob Ferguson filed a lawsuit to block the deal citing that it would reduce competition, bring higher prices to consumers and harm workers. On February 14, Colorado state AG Phil Weiser filed a separate lawsuit aiming to block the deal with similar claims.
But the deal has faced backlash since its announcement. Ferguson was among one of the first AGs to file a suit looking to block a $4 billion special dividend payment that was announced after the merger was proposed. Multiple other state AGs followed suit with their own filings, but the payment was approved in January 2023 after delays due to the litigation.
Consumer groups and unions have also filed objections to the merger claiming it will lead to higher prices at checkout and lower wages for grocery workers. If approved, Kroger and Albertsons would operate a combined network of about 5,000 stores across the country and employ over 700,000 workers.
